The Corvus | August 2018
to do for value what the internet did for information .
Is blockchain a disruptive technology ?
There is a general belief that the blockchain concept is a disruptive technology , much like Uber , AirBnB , Facebook , Alibaba , etc , that distorts the competitive landscape by attacking traditional business models with lowercost technological solutions enabling it overtake the dominant market players within a relatively short period of time . This article takes the approach that the Blockchain technology is rather more foundational than disruptive . Foundational technologies in addition to enabling the establishment of new business models and markets , allow for the gradual adaptation and development , achieving efficiency and cost effectiveness over time . Whilst the huge potential of blockchain cannot be contested , there are concerns that it could revolutionize business , redefine economies and de-emphasize government ’ s power in certain industries in the shortest possible time are rather premature . The affordability and acceptability of the blockchain technology is still years ( if not decades ) away . Taking a cue from the progress of other foundational technological advancement reveals that there would be some hurdles – governance , regulatory , technological and societal – to surmount on its way to becoming wide spread .
How then does blockchain technology work ?
Blockchain was first mentioned in a Bitcoin research paper in 2008 . It is a chain of connected blocks about transactions . Each Block has a hash 1 of the previous block as well as the timestamp and transactional data . When a block is full or completed with transaction , a new block is created with the same attributes as the previous one . Each member of the network has a copy of the blockchain database and the systems are synchronised at short intervals to ensure that all members of network have the original , updated and correct version of shared database . The process of blockchain functionality is exemplified below :
• Member X consummates a transaction with Member Y through a client
• Blockchain Miners receive an order on the transaction and is added to the mining block 2
• The block is mined when one of the miners completes the block faster than others
• The new mined block is added as the latest block in the blockchain and the copy is broadcasted through the network
The security of the blockchain technology has sometimes been , albeit unconsciously , over-estimated by most blockchain experts . Whilst this is not entirely true as no system is unhackerable , it might take more than an arm and a leg for this technology to be hacked . The way the different blocks are interrelated and arranged makes it arguably the most secure technology today . The reason for this is not far-fetched . To successfully breach the security of the technology , one would need to hack into every single system on the network . Though not an impossible thing to do , it comes across as an extremely difficult task to accomplish without being detected .
Where can blockchain technology be applied ?
The proponents of Blockchain technology have received loads of accolades for the ground breaking and widely hyped Bitcoin which promoted a peer to peer version of e-cash that would allow online payments and transfers to be sent directly from one person to another without having to go through a bank or own a bank account . Our fascination at the mere conception of the thought still outweighs the excitement that comes with the huge potential that the concept holds .
Cryptocurrencies ( Cryptos ) are one of the first applications of the blockchain technology . It is a digital , decentralized medium of exchange whose creation is controlled by cryptography . There have been earlier attempts to create centralized digital currencies which failed but in 2008 the first crypto which was named Bitcoin was created . It was described as a new digital cash system that is decentralized with no central
1
Hash is the fixed-sized data generated after an arbitrary amount of data is processed using some algorithms .
2
Mining of blocks is the process of verifying and recording new transactions on a public ledger of approved ones .
35 Demystifying Blockchain Technology